Exchange Fund Investment (EFI) will use a combination of share placements, unitisation, exchangeable bonds and corporate buybacks to unload about $100 billion worth of Government stocks, chairman Yang Ti Liang said.
Share placements to Mandatory Provident Fund (MPF) scheme providers were an option being considered, government sources said.
'The MPF scheme providers will be long-term investors,' a source said.
'Share placements to them will avoid short-term volatility in the market.' MPF schemes will start collecting contributions in December next year, taking in $10 billion in the first year and up to $30 billion a year at a later stage.
Another source said another option envisaged the disposal of up to $40 billion in shares using placements and buybacks in the coming months, with further tranches to be offloaded in the medium term through a convertible bond issue and the formation of a unit trust sold to institutional and retail investors.
However, Hong Kong Monetary Authority chief executive Joseph Yam Chi-kwong rejected the suggestion, saying the timetable and ways of disposal of the shares had yet to be determined.
